EADI Conference 2014 - The Broker panel session - Presentation Sara Murawski

EADI Conference 2014 - The Broker panel session - Presentation Sara Murawski

• 1.
  Inequality and thepost-2015 agenda
• 2.
  This panel consistsof: ● Sara Murawski (The Broker) ● Marc Vandepitte (Technische School Mechelen) ● Evert-Jan Quak (The Broker) ● David Sogge (Transnational Institute and NOREF)
• 3.
  Discuss inequality andthe post-2015 agenda at www.thebrokeronline.eu
• 4.
  Inequality is ahot topic.. ● International institutions: World Bank, IMF and OECD have changed their discourse.. “The benefits of economic growth DO NOT trickle down automatically. Greater inequality DOES NOT foster social mobility.” (OECD 2012)
• 5.
  Inequality is ahot topic.. ● Recent literature & newspapers: Joseph Stiglitz (Price of Inequality, 2012), Paul Krugman (NYT) Martin Wolf (FT), Thomas Piketty with Capital in the 21st century and his famous formula r > g..
• 6.
  Inequality is ahot topic.. ● (International) governments: World Economic Forum (2014), Obama's State of the Union, European troika.. “One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy.” (Christine Lagarde, IMF)
• 7.
  Post-2015 process ● MDG'sdid not pay a lot of attention to inequality ● High inequality puts MDG's under pressure ● But income inequality does play an important role in the design of the post-2015 agenda: -Open Working Group (OWG) on Sustainable Development Goals (SDG) -Letter from 90 academics to High Level Panel (HLP), calling for 'top-level goal to reduce inequalities'
• 8.
  What do thenumbers tell us? ● Income inequality measured by the Gini-index, focused on within-countries ● The world’s richest 1% owns 40 % of global wealth, while the bottom half owns merely 1% ● Two thirds of the world population live in countries where income inequality increased between the mid 1990s and the mid-to-late 2000s ● The crisis has worsened inequality
• 9.
  Increasing inequality worldwide (source:Conference Board of Canada, 2012):
• 10.
  Fragile global middleclass ● More than a billion people live in extreme poverty (below $1.25 line) ● In 2010, 2.8 billion people, which is 40% of the world's population, was living on a daily income of $2 - $10 ● Almost 1 billion people live just above the poverty line, between $2 and $3 ● Economists warn that the global middle class is very fragile, and runs the risk of falling below poverty lines due to the slow-down of the global economy
• 11.
  Fragile global middleclass (source: Financial Times)
• 12.
  Relation between inequalityand growth: ● Kuznets curve has been severely criticized ● Inequality hinders poverty reduction ● Inequality blocks growth itself “Over longer horizons, reduced inequality and sustained growth may thus be two sides of the same coin.” (Berg & Ostry, IMF, 2011)
• 13.
  Growth is notper definition good.. ● It often leads to more inequality, because trickle down does not work ● It exhausts our planet and natural resources (Tim Jackon (2009): Prosperity without growth)
• 14.
  The complex dilemmaof growth: ● It seems that inequality, at least on the short and middle run, can only be reduced by economic growth (fragile middle class) ● Slow growth might cause more inequality, because it strengthens the power of employers at the cost of labour unions ● But growth also causes inequality ● Unequal growth can have detrimental effects on societies and the environment
• 15.
  Inclusive growth musttake account of the circumstances under which inequality has increased: ● Globalization ● Financialization ● Skill-biased technological change ● Flexibilization of the labour market
• 16.
  What the Westernworld could do: ● Reform the financial sector in order to prevent another global financial crisis ● Dismantle tax havens ● Review international investment treaties and develop a framework for fair global trade ● And..?
• 17.
  That's all fornow..